Time Warner urges Hulu to do away with the one major advantage it holds over the competition

Hulu and its owners, Walt Disney Co., 21st Century Fox Inc. and Comcast Corp., have been interested in bringing Time Warner Inc. on as a fourth owner for the past several months. Negotiations between the two sides have reportedly been heating up as of late with regard to the topic of current-season shows.

Sources familiar with the matter tell The Wall Street Journal that Time Warner is interested in becoming an equal stakeholder alongside Hulu's current owners. To make this happen, the existing shareholders would have to draw down their stakes to 25 percent each but that doesn't appear to be a serious hurdle.

As you may know, one of Hulu's major advantages over competing services is the fact that it offers current seasons of many television shows. It's a bit of a double-edged sword and one that Time Warner isn't too thrilled about.

Hulu's existing strategy allows subscribers to get caught up on current-season shows. Once caught up, said user may then be likely to watch the latest episodes as they air via their cable or satellite subscription, ultimately boosting the show's ratings. By removing current season episodes from Hulu, users are less likely to get caught up on new shows and thus, less likely to tune in at all which would hurt ratings.

One could argue that a user could also catch up on missed shows via on-demand services but then again, not everyone uses the on-demand feature and it's often restricted to local-access only meaning you have to be at home to watch it.

Time Warner's belief is that full, current-seasons on Hulu (or anywhere else outside of pay-TV) will lead to more cord-cutters, those who cancel their cable or satellite service entirely and rely solely on OTA broadcasts and services like Hulu for their viewing needs. As such, Time Warner doesn't want full, current season shows from its networks (think TBS, TNT and so on) on Hulu but understands the streaming service couldn't simply adjust its strategy overnight without major backlash from subscribers.

Sources say that at present, less than 25 percent of streams on Hulu are of current-season episodes. One of the reasons the figure is lower than you might expect is because Hulu has been steadfast in bolstering its lineup with older seasons of shows like Saved by the Bell and Seinfeld.

This "content investment" has helped Hulu boost its subscriber base to around 10 million US-based users. For comparison, Netflix has roughly 45 million domestic subscribers.

The good news, at least for Hulu users, is that the company reportedly doesn't have any plans to remove current seasons in the immediate future. In the long term, however (and especially if it brings Time Warner on as an equal part owner), that may very well change.

Wow and they wonder why we pirate shows so much. Instead of looking at the broader picture and seeing how people want their media and innovating from that information, they want to hold on to the dinosaur and think they can force us back to the stone age of television!

Wow and they wonder why we pirate shows so much. Instead of looking at the broader picture and seeing how people want their media and innovating from that information, they want to hold on to the dinosaur and think they can force us back to the stone age of television!

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Yep, that's cable companies for you. I refuse to watch commercials, PERIOD. There's nothing they can do or say that will EVER make me watch ads during a TV show. I don't care if it means the TV execs children starve to death and the entire industry collapses, so be it! I do NOT want to watch commercials and I'm not alone on this. If you insist on holding on to your antiquated method of making a profit by bombarding your viewers with endless commercials then you deserve to go out of business. End of story.

Wow and they wonder why we pirate shows so much. Instead of looking at the broader picture and seeing how people want their media and innovating from that information, they want to hold on to the dinosaur and think they can force us back to the stone age of television!

Click to expand...

Yep, that's cable companies for you. I refuse to watch commercials, PERIOD. There's nothing they can do or say that will EVER make me watch ads during a TV show. I don't care if it means the TV execs children starve to death and the entire industry collapses, so be it! I do NOT want to watch commercials and I'm not alone on this. If you insist on holding on to your antiquated method of making a profit by bombarding your viewers with endless commercials then you deserve to go out of business. End of story.

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I'll watch commercials, BUT only on free content like OTA or if I am on Hulu free or CBS, FOX, ABC, or NBC's website catching a show I missed on my OTA tv and forgot to setup a record. If I have to pay $75 a month to get access to the channels why isn't any of the money going to the networks, ohh wait it is. Time Warner is a company led by no one under the age of 50 and is in belief still they can dictate how there customers do things. This is why they are seeing more cable cutters at a alarming rate, the sooner they realize they are now a major ISP and focus there the better for all the people stuck with them.

Wow and they wonder why we pirate shows so much. Instead of looking at the broader picture and seeing how people want their media and innovating from that information, they want to hold on to the dinosaur and think they can force us back to the stone age of television!

Click to expand...

Yep, that's cable companies for you. I refuse to watch commercials, PERIOD. There's nothing they can do or say that will EVER make me watch ads during a TV show. I don't care if it means the TV execs children starve to death and the entire industry collapses, so be it! I do NOT want to watch commercials and I'm not alone on this. If you insist on holding on to your antiquated method of making a profit by bombarding your viewers with endless commercials then you deserve to go out of business. End of story.

Click to expand...

I'll watch commercials, BUT only on free content like OTA or if I am on Hulu free or CBS, FOX, ABC, or NBC's website catching a show I missed on my OTA tv and forgot to setup a record. If I have to pay $75 a month to get access to the channels why isn't any of the money going to the networks, ohh wait it is. Time Warner is a company led by no one under the age of 50 and is in belief still they can dictate how there customers do things. This is why they are seeing more cable cutters at a alarming rate, the sooner they realize they are now a major ISP and focus there the better for all the people stuck with them.

Click to expand...

I prefer not to watch commercials at all. Why? Because I do not have a Nielsen box on my TV nor do I participate in any Nielsen ratings program. Therefore, it makes no difference if I watch commercials. 99.99% of the time, the commercials are for garbage I would absolutely never buy, therefore, it is a waste of my time to watch them and all the marketing BS that goes with them. If I have to, I will, but only in the context of catching up on something that I missed recording OTA.

That said, I absolutely agree with you that TW is attempting to force people to watch TV the way they want people to watch TV. Hulu does not always allow unfettered access to current season shows. There are some current season shows that any subscriber to Hulu cannot watch unless they have a "Subscription TV Provider." Now TW wants Hulu to remove all current season shows even on top of this draconian restriction? Don't they frackin realize that IF they did allow anyone to watch these shows, their commercial revenue would go way up? WTF? How frackin stupid are these companies like TW, and the others?

As I see it, what TW does not realize yet is that people are fed up with being dictated to as to how to watch their TV. They wonder why they are bleeding customers, and with complete blinders on as to why people are dropping their crap service, they are stupid enough to try to dictate to Hulu even more of their blindfolded BS. I am willing to bet that if TW does succeed in dictating to Hulu that they remove all current season shows, that Hulu's subscriber base will drop, and TW's subscriber base will continue to hemorrhage, but perhaps at a much faster rate.

It is about time for industry execs to wake up and realize that the days of gouging people's wallets for crap customer service and crap programming are over, and figure out something new. The way that the current execs are hanging on to the old model reminds me of the clinical description of addiction. I stopped my co-dependency almost two years ago now, and I will never go back even if Hulu drops current season shows as most of the current season shows I watch now I get OTA. Once ATSC 3.0 hits the air, the days of bad OTA recordings will be gone.

...Sources familiar with the matter tell The Wall Street Journal that Time Warner is interested in becoming an equal stakeholder alongside Hulu's current owners. To make this happen, the existing shareholders would have to draw down their stakes to 25 percent...

Never. Ever. Make someone else an "..equal stakeholder.." in something you built. Sell if you're going to sell. But, "equal stakeholder" means they get you cheaper than the market price.